Value Investing Congress

[indythinker85]

http://www.valuewalk.com/2014/09/value-investing-congress-presentations-2/

[jschembs]

Congrats to board member Tim Eriksen for his spot in the lineup!

[Guest 50centdollars]

http://www.valuewalk.com/2014/09/guy-gottfried-radar-underfollowed-gems/

[indythinker85]

Big fan of Guy looks like his presentation not up yet - im sure when it is VW or MF will have it - seems these posts are password protected http://www.valueinvestingcongress.com/congress/new-york-2014-presentations/

[jschembs]

I'd be interested in seeing Citron's Zillow presentation as well, which doesn't appear to be posted.

[GrizzlyRock]

http://cdn1.valuewalk.com/wp-content/uploads/2014/07/Zillow-Trulia-final.pdf

 

[jschembs]

Thanks Kyle - that's their older report. I was assuming (hoping) he had some updated slides.

[Guest]

anyone know Gottfriend's track record?

[Guest JoelS]

Anyone have any thoughts on the Comcast Zones from Michael Kao's presentation? This looked to be the most interesting idea for me.

[peter1234]

anyone know Gottfriend's track record?

 

Don't know his cagr but his VIC presentations have performed very well.

;)

[Picasso]

Anyone have any thoughts on the Comcast Zones from Michael Kao's presentation? This looked to be the most interesting idea for me.

 

A quick glance at these bonds and I don't quite see the trade or excessive value.  CUSIP is 200300507 if anyone is interested.

 

They trade at around 46 on the offer.  Since they redeem at higher of principal (par value of 71.52) or conversion (8.51 of conversion value today) I would not bank on the value in the conversion.  I would probably play S or CTL directly if I thought that conversion value would go up from 8.51 to above 71.52 per note.  Although you get the upside on the stocks, that far out of the money with 15 years left is probably not worth much.  I'm ball parking that value in the 0.20-0.40 region based on other convertible bonds that far out of the money with 15 years left.

 

Softbank controls 80% of Sprint and will likely not be thinking of dividend payments in line with AT&T or Verizon.  Masayoshi Son basically said this in a Charlie Rose interview.  That eliminates some upside in the interest rate boost from underlying dividend increases.  I am not familiar enough with CTL or their potential spin-off.

 

The A- rated Comcast preferred trades at a 5% yield and these ZONES yield 6%.  The preferred is ultra-long duration with a short call which might make the 5% yield a weak benchmark against the notes.  Those will never quite get above $25 either.  But the preferred has more liquidity and tax preference of QDI. 

 

If you assume similar credit quality on the ZONES, you get a bump in yield with less duration risk and some optionality that I think is mostly worthless.  There is an almost 5% spread on the bid/ask so you better be happy with 6% or you'll be facing a stiff early sell penalty.

 

I'm not quite sold on the thesis and in fact I wouldn't pay more than $40 for these notes since the sacrifice in liquidity to get a 6% yield is sort of crappy.  I'd rather buy some Citigroup preferred and add some of the 106 strike warrants for 80 cents on a proportional basis to emulate this strategy.  Then again those warrants will not go out to 2029 (and the ZONES are backed by CMCSA which is better than S/CTL) but I doubt I'd want to own bonds for 15 years with the hope of something beyond a 9 bagger in S/CTL.  The longer the time frame for an early par takeout, the lower your CAGR as well.

[indythinker85]

anyone know Gottfriend's track record?

 

Don't know his cagr but his VIC presentations have performed very well.

;)

 

I cant say more than this but Im 100% positive its 21% CAGR since inception in 2009 (including part of 2014)

[Guest 50centdollars]

anyone know Gottfriend's track record?

 

Don't know his cagr but his VIC presentations have performed very well.

;)

 

I cant say more than this but Im 100% positive its 21% CAGR since inception in 2009 (including part of 2014)

 

This article talks a bit about his performance:

 

http://www.wyattresearch.com/article/guy-gottfried/

[Guest JoelS]

Anyone have any thoughts on the Comcast Zones from Michael Kao's presentation? This looked to be the most interesting idea for me.

 

A quick glance at these bonds and I don't quite see the trade or excessive value.  CUSIP is 200300507 if anyone is interested.

 

They trade at around 46 on the offer.  Since they redeem at higher of principal (par value of 71.52) or conversion (8.51 of conversion value today) I would not bank on the value in the conversion.  I would probably play S or CTL directly if I thought that conversion value would go up from 8.51 to above 71.52 per note.  Although you get the upside on the stocks, that far out of the money with 15 years left is probably not worth much.  I'm ball parking that value in the 0.20-0.40 region based on other convertible bonds that far out of the money with 15 years left.

 

Softbank controls 80% of Sprint and will likely not be thinking of dividend payments in line with AT&T or Verizon.  Masayoshi Son basically said this in a Charlie Rose interview.  That eliminates some upside in the interest rate boost from underlying dividend increases.  I am not familiar enough with CTL or their potential spin-off.

 

The A- rated Comcast preferred trades at a 5% yield and these ZONES yield 6%.  The preferred is ultra-long duration with a short call which might make the 5% yield a weak benchmark against the notes.  Those will never quite get above $25 either.  But the preferred has more liquidity and tax preference of QDI. 

 

If you assume similar credit quality on the ZONES, you get a bump in yield with less duration risk and some optionality that I think is mostly worthless.  There is an almost 5% spread on the bid/ask so you better be happy with 6% or you'll be facing a stiff early sell penalty.

 

I'm not quite sold on the thesis and in fact I wouldn't pay more than $40 for these notes since the sacrifice in liquidity to get a 6% yield is sort of crappy.  I'd rather buy some Citigroup preferred and add some of the 106 strike warrants for 80 cents on a proportional basis to emulate this strategy.  Then again those warrants will not go out to 2029 (and the ZONES are backed by CMCSA which is better than S/CTL) but I doubt I'd want to own bonds for 15 years with the hope of something beyond a 9 bagger in S/CTL.  The longer the time frame for an early par takeout, the lower your CAGR as well.

 

 

Picasso, thanks for the thoughtful response - it is much appreciated.

[moody202]

Any recommendations on how to get better insight into his portfolio?

 

 

anyone know Gottfriend's track record?

 

Don't know his cagr but his VIC presentations have performed very well.

;)

 

I cant say more than this but Im 100% positive its 21% CAGR since inception in 2009 (including part of 2014)

 

This article talks a bit about his performance:

 

http://www.wyattresearch.com/article/guy-gottfried/

[Guest]

Anyone have any thoughts on the Comcast Zones from Michael Kao's presentation? This looked to be the most interesting idea for me.

 

A quick glance at these bonds and I don't quite see the trade or excessive value.  CUSIP is 200300507 if anyone is interested.

 

They trade at around 46 on the offer.  Since they redeem at higher of principal (par value of 71.52) or conversion (8.51 of conversion value today) I would not bank on the value in the conversion.  I would probably play S or CTL directly if I thought that conversion value would go up from 8.51 to above 71.52 per note.  Although you get the upside on the stocks, that far out of the money with 15 years left is probably not worth much.  I'm ball parking that value in the 0.20-0.40 region based on other convertible bonds that far out of the money with 15 years left.

 

Softbank controls 80% of Sprint and will likely not be thinking of dividend payments in line with AT&T or Verizon.  Masayoshi Son basically said this in a Charlie Rose interview.  That eliminates some upside in the interest rate boost from underlying dividend increases.  I am not familiar enough with CTL or their potential spin-off.

 

The A- rated Comcast preferred trades at a 5% yield and these ZONES yield 6%.  The preferred is ultra-long duration with a short call which might make the 5% yield a weak benchmark against the notes.  Those will never quite get above $25 either.  But the preferred has more liquidity and tax preference of QDI. 

 

If you assume similar credit quality on the ZONES, you get a bump in yield with less duration risk and some optionality that I think is mostly worthless.  There is an almost 5% spread on the bid/ask so you better be happy with 6% or you'll be facing a stiff early sell penalty.

 

I'm not quite sold on the thesis and in fact I wouldn't pay more than $40 for these notes since the sacrifice in liquidity to get a 6% yield is sort of crappy.  I'd rather buy some Citigroup preferred and add some of the 106 strike warrants for 80 cents on a proportional basis to emulate this strategy.  Then again those warrants will not go out to 2029 (and the ZONES are backed by CMCSA which is better than S/CTL) but I doubt I'd want to own bonds for 15 years with the hope of something beyond a 9 bagger in S/CTL.  The longer the time frame for an early par takeout, the lower your CAGR as well.

 

 

Picasso, thanks for the thoughtful response - it is much appreciated.

 

thanks for the information, gentleman. :)

[peter1234]

anyone know Gottfriend's track record?

 

Don't know his cagr but his VIC presentations have performed very well.

;)

 

I cant say more than this but Im 100% positive its 21% CAGR since inception in 2009 (including part of 2014)

 

Apparently with high allocation to cash (up to 40%)

;)